As Bitcoin (BTC-USD) continues its upward trajectory, two major players in the crypto space have successfully merged.
On November 30, Canadian crypto mining company Hut 8 Mining Corp (NASDAQ:HUT) announced its official union with US Bitcoin Corp. This merger could potentially birth a significant new crypto entity.
The first day of trading for the newly formed HUT stock on both the Nasdaq and Toronto Stock Exchange is upon us. The previous Hut 8 shares have been delisted from both exchanges, with investors receiving “0.2 of a share of New Hut common stock for every Hut 8 share held.”
So, what should investors anticipate from this fresh crypto stock as the rally keeps digital asset prices high? Let’s delve into this new company and evaluate its potential future.
Before the current rally, many crypto mining stocks were struggling, facing an uncertain future. Now, numerous companies in the space are back in the spotlight as investors seek ways to capitalize on the current rally.
The timing has been perfect for HUT stock. Shares soared on November 30 with the news of the completed merger. Although the momentum has slightly decreased today, the new stock is still up nearly 350% for the month.
Despite HUT stock dropping 10% today, the reaction to the merger sets a positive tone. Jaime Leverton, CEO of the new Hut 8 Corp, commented on the successful deal:
“This business combination is the largest M&A transaction that has ever transpired within our industry and represents a highly strategic union of two organizations with complementary strengths, that together, will prove to equal more than the sum of their parts. We are excited to move forward and continue growing, with a pipeline of greenfield and brownfield opportunities, integration across the mining value chain, leading operational leverage and expertise, and diverse and uncorrelated fiat revenue streams.”
The timing of this merger is crucial for another reason. The next Bitcoin halving event is scheduled for April 2024. Post-merger, Hut 8 now has “access to approximately 825 MW [megawatts] of gross energy across six sites with self-mining, hosting, and managed service operations,” according to Cointelegraph.
Historically, when a Bitcoin halving occurs, it often propels the crypto’s prices. Crypto miners will be preparing for it, and Hut 8’s new power puts it in a prime position.
The duration of the current crypto rally is uncertain. However, with the next Bitcoin halving looming, HUT stock is likely to benefit from the momentum generated by the event.
It’s undeniable that Hut 8 has always been heavily dependent on underlying crypto sentiment. But currently, the sentiment towards Bitcoin and other leading cryptos is bullish. For now, the new HUT stock is well-positioned to continue riding the wave.
Crypto mining stocks are subject to a volatile market, but for the time being, investors can breathe easy.
Let us know what you think, please share your thoughts in the comments below.
